Pathways to Global Tax Governance and the Multidisciplinary Approach

By Frederik Heitmüller

On 7 November 2018, we held a seminar —Pathways to Global Tax Governance. Perspectives from the Netherlands and the Think20 Network —at the Faculty of Global Governance of Leiden University in the Hague to discuss global tax governance. As a Think20 (T20) Associated Event, the background for the discussion were two policy briefs produced by the T20 network, one on tax competition and one on tax expenditures.

Irma Mosquera and Adrián Grant started the afternoon by introducing the GLOBTAXGOV Project and its research objectives to an audience of diverse backgrounds — researchers in tax law, economics, political science, as well as representatives from government, businesses and civil society.

In the first session, which was moderated by Koos Boer, tax competition was discussed by Christian von Haldenwang, Stef van Weeghel, Aart Roelofson, and Irma Mosquera from both empirical and normative points of views, thereby adopting perspectives from both developing and developed countries. Among others, the following points were discussed:

  • Is it possible to differentiate between harmful and fair tax competition?
  • Is all tax competition harmful?
  • How much tax competition is actually occurring?
  • How should countries deal with it?
  • At what level should cooperation take place?
  • What other issues are neglected in the current discussion?

In the second session, Agustin Redonda introduced the policy brief on tax expenditures, Rocus van Opstal provided a perspective from within the Dutch government and Koen Caminada discussed empirical data on the issue. There was an agreement on the need for transparency on tax expenditures and for more clarity in public debate about which tax expenditures are really effective, highlighting the necessity to tell correlation and causality apart. Further questions included:

  • How much international cooperation is needed in the matter of tax expenditures?
  • On which taxes should government efforts focus in order to raise enough revenue for reaching the sustainable development goals?

The day ended with a roundtable discussion on the role of the Netherlands in the G20 process. Some discussants claimed that the Netherlands should be modest in its expectations to influence the debate, both due to its small weight in global affairs and due to its tainted reputation in issues of tax competition. Others disagreed on both issues and suggested that the Netherlands may take advantage of its smaller size and lack of hard political power to play the role of a mediator between large countries and to use intellectual influence and knowledge.

The event showed that various disciplines can learn a lot from each other and are able to find a common ground for discussion as well. The organizers hope that the discussions will inspire participants to take the discussed issues further and produce new ideas on the interrelated issues of taxation, economic development, fairness and global governance.

All presentations of the seminar can be accessed here.